Elite Data Services Inc. (OTCBB:DEAC) announced that it has entered into a security purchase agreement with new investor EMA Financial LLC for a 12% convertible promissory note for gross proceeds of $156,500 on July 14, 2015. The note bears a fixed interest rate of 12% per annum and will mature on July 14, 2016. After broker and legal fees, the company received $135,000. The note is convertible into shares of the company at any time on or after the issuance date. The conversion price is 60% multiplied by the lowest sale price for the common stock during the 20 trading days prior to the relevant notice of conversion. If the company's share price at any time loses the bid, then the outstanding principal amount may be increased by 20% in the investor discretion. Additionally, the company is required to issue to the investor 100,000 shares of common stock of the company within three days following the closing date as a loan fee. The investor does not have the right to convert the note into common stock if such conversion would result in the investor beneficial ownership exceeding 4.9% of our outstanding common stock at that time. The company agreed to reserve an initial 8,000,000 shares of common stock for conversions under the note. The investor may extend the note maturity date by providing us with written notice at least five days before the note maturity date. However, the investor may only extend the note maturity date for up to an additional one-year period. Any amount of principal or interest that is due under the note, which is not paid by the note maturity date, will bear interest at the rate of 24% per annum until it is paid.

Any prepayment is subject to payment of a prepayment amount ranging from 110% to 150% of the then outstanding balance on the note depending on when such prepayment is made. The note may be prepaid in whole or in part with following penalties, if the convertible note is prepaid within 1-30 days from the date of issuance then at 110% of the face amount plus any accrued interest, or if note are prepaid with 31 days but less than 60 days after the date of issuance, then at 120% of the face amount and any accrued interest, or if note are prepaid within 61 days but less than 90 days then at 130% of the face amount and accrued interest, or if note are prepaid within 91 days but less than 120 days then at 140% of the face amount and accrued interest, or if note are prepaid within 121 days but less than 181 days then at 150% of the face amount and accrued interest. The 12% convertible note may not be prepaid after 180 days without written permission. The company issued securities pursuant to exemption provided under Regulation D. The company will pay or reimburse to purchaser a non-refundable, non-accountable sum equal to $6,500.